The article points out that Apple did switch to an Intel manufactured modem at one point, but they allege Qualcomm retaliated by withholding a rebate payment to

The article points out that Apple did switch to an Intel manufactured modem at one point, but they allege Qualcomm retaliated by withholding a rebate payment to Apple. I'm assuming that Qualcomm has a list price for their chips, but negotiates a rebate on that price if a contract is fulfilled, or some other generic business promise is arranged. It also goes on to suggest that the portion of payment Qualcomm received from each phone sold is a percentage of the retail or wholesale price of the phone, pointing out that increasing the storage capacity of a phone from 128GB to 256GB, which I assume does not alter the bill of materials supplied by Qualcomm in any way, results in a larger payment to Qualcomm. Your point that Apple should not have developed a CDMA phone makes sense, but it also means that millions of people would be stuck on a network without an iPhone. Apple got so much shit from the public for having an exclusivity agreement with AT&T here in the states, which in large part drove early jailbreaking progress to open the carrier lock, that it makes good business sense to try and reach those potential customers. I would imagine that Apple reluctantly agreed to a contract for CDMA modems that was less than favorable to Apple in hopes of renegotiating at a later date when Apple became more of a dominant customer, and has since failed in all of their tactics.